Authored by Felicity Bradstock via OilPrice.com,
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The EU has committed $27.4 million to the Italian H2 Backbone project, part of a 3,300 km pipeline to deliver hydrogen from North Africa to Europe by 2030.
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Algeria and Tunisia support the project despite lacking solid export strategies, and currently plan to supply only 8% of the pipeline’s capacity by 2030.
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A recent study warns that without significant policy support, African green hydrogen may be economically unviable for Europe due to high production costs.
As several countries expand their green hydrogen production capacities, regions will have to develop new pipelines and energy transportation corridors to support a green transition across borders. Some countries are more well-suited to producing green hydrogen than others, meaning that energy sharing could help non-production countries gain access to clean fuel to help decarbonise. Advancements have been made in connecting North Africa with Europe in recent years and green hydrogen is likely to start flowing through pipelines by as early as 2030.
In June, the European Climate, Environment and Infrastructure Executive Agency awarded $27.4 million to advance the Italian H2 Backbone project, the North Africa-Europe hydrogen link. The project is part of the larger SoutH2 Corridor, a 3,300 km hydrogen pipeline network under the Mediterranean Sea that is expected to transport up to 4 million tonnes of hydrogen from North Africa to southern Germany each year. Transmission system operators from Germany, Austria, and Italy are developing the project. The 1,900 km H2 Backbone stretch will consist of 60 percent converted gas pipelines and is expected to be completed by 2030.
Algeria and Tunisia agreed to support the European powers with the project in January, despite neither having a clear hydrogen export strategy for the end of the decade. There has long been talk about North Africa becoming a green hydrogen superpower, by converting solar power into the clean electricity needed to power electrolysis for the green hydrogen production process. However, several challenges stand in the way of achieving the output of green hydrogen required to achieve regional green transition aims.
The project aims to connect hydrogen plants in Algeria and Tunisia to the Italian island of Sicily and consumer hubs in Austria and Germany. However, neither production site has yet been developed in the two North African countries, and both expect large-scale green hydrogen production to take around a decade to develop. Meanwhile, the corridor is expected to deliver over 40 percent of the EU’s target to import 10 million tonnes of green hydrogen by 2030 when fully operational, according to the project consortium. At present, Algeria and Tunisia expect to have combined capacity to export around 330,000 tonnes of hydrogen – or 8 percent of the pipeline’s capacity – by 2030.
It is not just North Africa that Europe is looking to for green hydrogen, with the EU having financed projects in Kenya, Mauritania, and Namibia. Financing has mainly supported green ammonia projects in these regions. The European Union also recently invested $5.4 million, as part of its Global Gateway strategy, to advance South Africa’s clean energy sector, particularly green hydrogen, this year.
European Commission President Ursula von der Leyen emphasised South Africa’s potential to become a global leader in green hydrogen thanks to its abundant renewable energy resources. South Africa also has around 91 percent of the global platinum group metal reserves, which is needed to produce electrolysers. The EU aims to finance facilities to attract higher levels of public and private funding into the renewable energy sector, as well as boost trade relations. The EU will also provide technical assistance for hydrogen project development. The collaboration supports South Africa’s Just Energy Transition Partnership, which aims to help the country move away from fossil fuels to renewable alternatives.
In March, von der Leyen stated, “Together with private companies, we can unlock investments in clean energy, raw materials, and green hydrogen. We can strengthen local industry by securing agreements for future production, providing certainty. And we can facilitate the trade of made-in-South Africa products to Europe.”
Several African countries are finally seeing the investment needed to support a green transition from high-income European countries. However, developing a large-scale green hydrogen industry from scratch is extremely complex and it could take decades to reach the output needed to support regional decarbonisation aims.
One study, published in the Nature Journal in June, has cast doubt on the economic viability of Africa’s aim to export green hydrogen to Europe. The study suggests that unless significant policy support is introduced, North African green hydrogen may be too expensive for European markets. The study found that “without European policy interventions, green H2 from Africa remains prohibitively expensive with least costs from €4.2 kgH2−1 to €4.9 kgH2−1 depending on the interest rate environment.” By contrast, the cost of producing grey hydrogen using natural gas stands at between €1 to €2 per kg.
There is great optimism around establishing a green hydrogen corridor to connect Europe with North Africa. Investment in the energy link could help several African countries to develop their renewable energy and green hydrogen industries, as well as provide European countries with the green fuel needed to help decarbonise. However, achieving this will require policy support across several countries, as well as greater investment in rapidly scaling up green hydrogen operations and driving down production costs.
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